Cause and Effect Can Solve the Immigration Problem

By Chuck McGlawn

The US and especially Alabama is about to get a real-life lesson on “Cause and Effect”. That is if the courts stay out of Alabama’s H.B. 56, passed on June 9, 2011. Alabama can now boast of having the nation’s harshest anti-immigrant law. The law makes it a crime to be without status.  The Court intervened in Arizona, removing the real teeth from SB 1070 and averting the real economic disaster. Alabama might not be as lucky, the dominos are already falling.

It is really easy to say, as Center for American Progress has that, “$40 million—A conservative estimate of how much Alabama’s economy would contract if only 10,000 (8%) of the  undocumented immigrants stopped working in the state.”  It is a lot harder to say, how does Chad Smith of Smith Farms, replace the $300,000 lost because of labor shortages in the wake of H.B. 56. Harder still what happens to the supervisory staff (likely citizens) that lose their jobs? What happens the piano teacher that loses 25% of her students because of lost profits and lost jobs. Will she be able to make her mortgage payment? How wide and how deep does the loss of $300,000 profit go? Let me say. it touches everyone. Homeless Freddie doesn’t eat today because waitress Madge didn’t get her regular tips from the Jones’ family who couldn’t afford their Friday Family Feast at the local Pizzeria because the increased cost of food for every night dinner drained the Friday Family Feast Funds. Tony’s profits are cut because he must have new menus printed to reflect the new higher prices. (By the way, I am taking up a collection for a “hit-man” for the idiot that says, “The printer’s business is up”) There is just no way that the incremental pain and suffering can be measured and set forth in any research study.

If Alabama is successful and every undocumented immigrant self-deports, Alabama will lose over 18,000 jobs and 2.6 billion in economic activity according to a Perryman Group study  

Alabama’s State Senator, Scott Beason continues to say HB56, is a “jobs bill” although this is contrary to all evidence. Based upon all available economic research and evidence, the Federal Reserve Bank declared “there is no evidence that immigrants crowd out U.S.-born workers in either the short or long run.” It further found that Statistical analysis of state-level data shows that immigrants expand the economy’s productive capacity by stimulating investment and promoting specialization. (Emphasis added)  This produces efficiency gains and boosts income per worker. At the same time, the evidence is scant that immigrants diminish the employment opportunities of U.S.-born workers.

And concerning HB56, economists almost universally (Emphasis added) concur that: Anti-immigration laws like Alabama’s are jobs and economic growth killers. These laws play well politically but are based on flawed economic logic. The reason for this is that, as Michigan economics professor Mark Perry says, “There is no fixed pie or a fixed number of jobs, so there is no way for immigrants to take away jobs from Americans. Immigrants expand the economic pie.”

What will HB56 do to Alabama’s economic pie?  A study by the Perryman Group, produced an “An Analysis of the Economic Impact of Undocumented Workers on Business Activity in the US with Estimated Effects by State and by Industry” as we have said above, The study concludes that if Alabama is successful and every undocumented immigrant self-deports, Alabama will lose over 18,000 jobs and 2.6 billion in economic activity, and these numbers are even understated:

Therefore, with HB56 standing alone (the “static scenario”) without any “contemporaneous adjustment” at the federal level, Alabama stands to lose over 51,000 jobs and 8 billion in economic activity. (BTW, this is the present situation.)
Because of these staggering numbers, the analysts conclude:
The most compelling conclusions from this assessment are (1) the undocumented workforce is vital to US business growth and prosperity (and, in some cases, sustainability) and, thus, (2) an enforcement-only and removal approach is simply not viable. . .
The Perryman Group’s analysis indicates that the undocumented workforce has a positive effect on the economy. It is becoming more and more apparent that Dr. Keivan Deravi, an economics  professor at AUM and budget adviser to the Legislature, was right, HB56 “wasn’t supported by facts and wasn’t based on real economic theories and research.” 
The Cause and Effect lesson will become very clear when, the second most asked question in Alabama, right behind “Where are your papers” is, “Where are our profits?”